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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of the Applications of
Shareholders of CBS Corporation,
(Transferor)
and
Viacom, Inc.,
(Transferee)
For Transfer of Control of CBS
Corporation and Certain Subsidiaries, Licensees
Of KCBS-TV, Los Angeles, CA, et al.
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File Nos. BTCCT-19991116ABA, et al.
MEMORANDUM OPINION AND ORDER
Adopted: May 3, 2000 Released: May 3, 2000
Before the Commission: Commissioner Furchtgott-Roth concurring in part, dissenting in part and issuing a
separate statement; Commissioner Tristani approving in part, dissenting in part and issuing a separate
statement.
1. The Commission has before it for consideration the applications to transfer control of the CBS
Corporation ("CBS") and its various licensee subsidiaries to Viacom, Inc. ("Viacom"). Petitions to deny
the applications were filed by the American Cable Association ("ACA"), the National Black Media
Coalition ("NBMC"), the WEYS Television Corporation ("WEYS"), and a group of petitioners objecting
to certain broadcasts made by Howard Stern ("the Stern Petitioners"). In addition, the A.H. Belo
Corporation ("Belo") filed a letter opposing the applications after the petition to deny period had expired.
We will exercise our discretion pursuant to 1.41 and treat the letter as an informal objection. For the
reasons stated below, we deny the petitions and informal objection and grant the applications subject to
conditions to ensure compliance with our multiple ownership and cross-ownership rules.
I. Introduction
2. On November 16, 1999, CBS and Viacom filed applications seeking Commission consent to the
transfer of control of CBS and its subsidiary companies which are the licensees or permittees of numerous
broadcast stations. CBS and its subsidiaries hold the licenses or construction permits of 20 television
stations and 162 radio stations, in addition to various broadcast translator and auxiliary licenses. Viacom
is the direct and indirect licensee or permittee of 18 television stations and several translator stations.
Viacom is a publicly traded corporation that is currently controlled by National Amusements, Inc. ("NAI"),
a single majority shareholder. Sumner Redstone controls NAI through the Sumner M. Redstone Trust.
3. The applicants have made showings to support their contention that the proposed merger will
fully comply with our radio and television duopoly rules. They have also made showings regarding those
markets where the combined entity would own radio and television stations in excess of the permissible
limits set out by our cross-ownership rule. In those markets, the applicants have requested time to come
into compliance with that rule. Because the merger would result in violations of our Dual Network Rule
and the national television ownership limit, the applicants have also requested time to bring the combined
entity into compliance with those rules. Finally, the applicants have sought continued satellite waivers for
certain television stations. The petitioners to deny oppose allowing the applicants time to come into
compliance with our Dual Network Rule and the national ownership cap. NBMC makes additional
allegations regarding EEO and news distortion violations by CBS. The Stern Petitioners allege that certain
broadcasts of the Howard Stern program violated the laws governing indecent or obscene broadcasts.
II. The Transaction
4. Viacom currently has two classes of publicly traded common stock, Class A (voting) and Class
B (non-voting). The merger agreement calls for CBS shareholders to receive 1.085 shares of Viacom Class
B stock for each share of CBS common stock. There will be no change in the ownership of Viacom Class
A stock and ultimate control of Viacom will remain with Mr. Redstone.
5. Currently, Viacom has a ten-member board of directors. Eight new directors, drawn from CBS'
current board, will be added to the Viacom board after closing. For a period of three years, there can be no
change in the size of the Viacom board or any removal of a CBS director without a supermajority vote of
the board members. During that same period, directors from the CBS group will appoint replacements of
the CBS directors. Likewise, directors from the Viacom group will appoint replacements for the Viacom
directors. At the end of the three years, all directors will be elected by plurality vote of the Class A
shareholders, whose votes are under Mr. Redstone's control.
6. Following the merger, Mr. Redstone will remain chairman and chief executive officer of
Viacom. Mel Karmazin, the current president and chief executive officer of CBS, will become president
and chief operating officer of Viacom.
III. The Dual Network Rule
7. CBS is the owner of the CBS television network, one of the nation's four largest broadcast
networks. Viacom owns UPN, the United Paramount Network, a relatively new national broadcast
network. Section 73.658(g)(1) of our rules prohibits any entity from owning two or more television
"networks." That rule defines a network as an entity " which offers an interconnected program service on
a regular basis for 15 or more hours per week to at least 25 affiliated television licensees in 10 or more
states. " CBS, with its nationwide coverage, provides programming well in excess of 15 hours per week
to over 25 affiliates and, therefore, is covered by this definition. While UPN does not fit within this
network definition, the Dual Network Rule prohibits the common ownership of a network defined under
(g)(1) with:
" an English-language program distribution service that, on February 8, 1996, provided four or
more hours of programming per week on a national basis pursuant to network affiliation
arrangements with the local television broadcast stations in markets reaching more than 75 percent
of television homes "
Viacom argues that UPN did not have the requisite audience reach on February 8, 1996 to be covered by
(g)(2). In its petition, WEYS challenges the contention that UPN would not be covered by the Dual
Network Rule. Viacom also argues that, should the Commission find that UPN is covered by (g)(2) and
that the combined entity violates the Dual Network Rule, it should be allowed twenty-four months to come
into compliance because of the unique circumstances of this transaction. ACA, WEYS, NBMC and Belo
argue that the requested twenty-four months is without precedent, against the public interest, potentially
anti-competitive and should be denied.
8. Viacom concedes that UPN provided four or more hours of programming per week on a
national basis pursuant to network affiliation arrangements with local broadcast stations. However, Viacom
claims that UPN's national audience reach on February 8, 1996 was only 72.4% of television homes, based
on a count of stations with which UPN held a primary affiliation agreement. In making this claim,
Viacom excludes from its count any stations with which UPN held a secondary affiliation agreement. The
stations that had a secondary affiliation agreement with UPN reached an additional 18.6% of television
households, giving a total of 91% of television households that UPN reached either through primary or
secondary affiliates.
9. Viacom argues that secondary affiliation agreements are "license agreements" which are, in
effect, syndication agreements. These license agreements permit programs to be aired "out of pattern" at
times negotiated by the station. For example, rather than run a UPN program during its regularly scheduled
network time, a secondary affiliate might run that program on the weekend or in late night. Also, Viacom
states that secondary affiliates are not required to identify and promote their connection with UPN, denying
the network the benefit of "branding" with those stations. Finally, secondary affiliates receive a separate
feed from the primary affiliates, which does not include network promotions or programs containing the
UPN logo at the bottom of the screen. Viacom also argues that the plain language of neither 73.658(g) nor
the underlying statute specifically states that the Dual Network Rule is to apply to UPN.
10. Though Viacom may call its "arrangements" with its secondary affiliates "license agreements,"
it still considers those stations as UPN affiliates and not merely as stations to which a Viacom subsidiary
sells programming. Both the statute and the rule refer to network affiliation "arrangements" and do not
make any distinction between primary and secondary affiliates. There is no evidence that Congress intended
for such a distinction to be made. Indeed, if Viacom's argument is accepted, then 202(e) of the
Telecommunications Act of 1996 does not apply to anyone and Congress has enacted a law with no
meaning or purpose. It is a basic rule of statutory construction that a statute is presumed to have some
meaning and application. Furthermore, Viacom's argument that the Dual Network Rule does not refer to
UPN by name and should not automatically be considered to include UPN directly contradicts the
legislative history of the provision, which refers by name to the two "emerging networks, (WBTN, UPN)"
in describing the networks to which the prohibition applies. Therefore, it appears clear that Congress
intended the Dual Network Rule to apply to UPN. Recognizing that Congress intended the Dual Network
Rule to apply to UPN and crafted it to so apply, we are persuaded that all network affiliation agreements,
primary and secondary, should be counted towards determining a network's national audience reach. We
conclude that 73.658(g)(2) includes UPN within its prohibition on dual network ownership.
11. In support of their alternative request for twenty-four months to come into compliance with the
Dual Network Rule, the applicants argue that requiring the merged entity to sell a national broadcast
network, with the concomitant effects on the financial standing of the network, its affiliates and its program
suppliers, is without precedent. The applicants state that (1) UPN, its affiliate stations and its program
suppliers are all financially inter-dependent; (2) UPN is not financially self-supporting; (3) an independent
purchaser is unlikely to assume the financial burden that Viacom has been carrying due to the high cost of
maintaining UPN; (4) the challenges presented by any divestiture are without precedent; and (5) it would
serve the public interest to allow the parties a reasonable opportunity to come into compliance in such a
way as to preserve UPN's unique services. The applicants also point out that UPN relies extensively on
UHF stations and in some cases LPTV stations to reach its audience. As noted above, in some cases UPN
does not have a primary network affiliation agreement with these stations. The applicants claim that
carriage under these circumstances is undesirable and will hurt any efforts to sell UPN. The applicants
further assert that no party has come forward to express any serious interest in buying UPN. Finally, the
applicants argue that, should no buyer be found and they be forced to shut down UPN, this would reduce
program diversity. They argue that this loss would be even more serious in light of UPN's history of
presenting programming targeted to minorities and of creating opportunities for minorities to participate in
the creation, production, writing and on-air presentation of programming. Therefore, the parties ask for a
twenty-four month period to come into compliance with the Dual Network Rule in order to avoid creating
a situation where it would be necessary to simply shut down the network.
12. ACA, WEYS, NBMC and Belo all oppose a twenty-four month period to come into compliance
as excessive and assert that it would provide no public interest benefit. ACA in particular asserts that the
ownership of two networks will lead to abuses in the granting of retransmission consent, abuses to which
small cable operators are especially vulnerable. ACA also asserts that CBS/Viacom will use the Dual
Network Rule to subsidize UPN, again by possibly manipulating the terms of retransmission consent
agreements. Belo points out that there will be markets where CBS or UPN owned and operated affiliates
will be competing against independent affiliates of the one of the networks owned by CBS/Viacom, which
could lead to unfair treatment of the independent affiliates.
13. On March 27, 2000, the applicants filed an amendment ("Amendment") to reflect Viacom's
acquisition of the remaining interest in UPN and to make certain representations regarding the operations
of UPN during any period prior to coming into compliance with the Dual Network Rule. In the
Amendment, the parties pledged:
Subject to Viacom' right to terminate UPN, Viacom will preserve UPN as
a viable, independent voice distinct from that of the CBS Television
Network during the period of time granted by the Commission for Viacom
to come into compliance with the dual network rule.
To this end, the executives in charge of programming at UPN will be
responsible solely for advancing the interests of that network. As they do
today, the two networks will continue to strive for diverse audiences
consistent with their separate programming strategies. Although the UPN
television programming executives may participate in incentive
compensation plans related to the performance of Viacom as a whole, such
executives' compensation will not be otherwise directly related to the
performance of the CBS Television Network.
14. We will deny the requested twenty-four month period, but will grant the parties twelve months
for the combined CBS/Viacom to come into compliance with the Dual Network Rule. Before entering into
this transaction, the applicants were aware that it could violate the Dual Network Rule. They cannot claim
any surprise that compliance with the law is required. We recognize that there are inter-dependent
relationships between program suppliers, affiliates and UPN, but we do not believe those relationships are
an impediment to bringing the merged entity into compliance with the rule. Indeed, those very relationships
are part of the value of UPN. Viacom initially argued that sale of UPN would be especially complex given
that the network was, in part, owned by Chris-Craft. Viacom, however, exercised a buy/sell option with its
former co-owner Chris-Craft. The exercise of this option gave Chris-Craft the opportunity to buy out
Viacom's interest in UPN for $5 million. Chris Craft declined to make this purchase. Viacom states that
Chris-Craft "reportedly attempted but failed to line up additional partners interested in investing" in UPN.
Viacom also states that "notwithstanding wide public knowledge of the potential divestiture of UPN,
Viacom received no bona fide proposals to purchase its 50 percent interest in the network."
15. Although Congress clearly intended the Dual Network Rule to apply to UPN, there is no
evidence that Congress intended for UPN or any other network to be sold at a "fire sale." The Commission
has long granted parties a reasonable time to come into compliance with our rules. In the cases of station
divestitures we have generally allowed a period of six to twelve months to come into compliance, and,
consistent with those decisions, we find that a period of twelve months would be appropriate here.
16. Although we recognize the concerns of the petitioners regarding the potential for abuse of
market power by the applicants during the period prior to coming into compliance, there is no evidence that
such conduct will actually occur, or that such potential abuses should be addressed by the Commission as
opposed to anti-trust authorities. Furthermore, we believe the pledges made by the applicants regarding the
separate operations of the two networks and the relatively limited period allowed for coming into
compliance minimize our concerns in this area. If the combined CBS/Viacom entity does violate our rules,
we can take appropriate action against such misconduct at that time.
IV. The National Ownership Cap
5. In their application, the parties state that the merged CBS/Viacom would control 38 television
stations (including one construction permit), provide programming to two additional stations pursuant to
local marketing agreements and have an ownership attributable interest in one additional television
station. These stations are licensed to 32 DMA's and reach slightly more than 41 percent of all national
television households.
6. The Telecommunications Act of 1996 and the Commission's rules prohibit the grant, transfer
or assignment of any television license to any entity if it would result in that entity having a cognizable
interest in television stations with an aggregate national audience reach exceeding 35 percent. Because the
aggregate national reach of the stations owned by the combined CBS/Viacom would be over 6% in excess
of the permitted level, the parties have asked for 24 months to come into compliance with the statute and
rule. ACA, WEYS, NBMC and Belo oppose granting the requested 24 months because there is no
precedent so to do and because it would not be in the public interest.
7. The parties have intertwined their arguments in support of a 24-month period to come into
compliance with the national ownership cap with their arguments for the same amount of time to come into
compliance with the Dual Network Rule. They repeatedly state that the interests of UPN, of the various
stations they refer to as owned and operated and of the independently owned UPN affiliates are complex
and interdependent. The parties claim their situation is different from other Commission proceedings
requiring divestiture because as many as 16 television stations may have to be sold to come into compliance
with the national ownership cap. They also cite to Commission proceedings involving divestiture
requirements under the newspaper/television cross-ownership rule and the cable/television cross ownership
rule where the Commission has allowed up to 24 months to come into compliance. The parties do not cite
to any case that only involved the divestiture of television stations where the Commission has permitted
more than 6 months to come into compliance with the multiple ownership rules.
8. First, there is no evidence that the applicants have to sell 16 stations to come into compliance
with the national ownership cap. As Belo points out, they could sell fewer stations in larger markets to
come into compliance with the rule. We will not dictate which stations the applicants must sell to come
into compliance with the national ownership cap, but we note that the combined entity could sell a single
television station, rather than 16 spread around the country, and come into compliance.
9. Second, all of the cases that the applicants cite in support of a divestiture period longer than 12
months dealt with proceedings where parties needed to comply with either the newspaper/television cross-
ownership rule or the cable/television cross-ownership rule. In those cases, the Commission permitted the
longer divestiture period because the relevant market factors associated with the sale of newspapers or cable
systems, such as the possible lack of demand for a newspaper or the limited number of potential buyers,
were different from those affecting broadcast stations. This is especially true over the last several years
where the number of sales of broadcast stations have increased significantly. In other words, the
Commission specifically distinguished those proceedings from broadcast station proceedings. There are no
cases involving only broadcast properties in which the Commission has permitted more than 12 months for
the requisite divestitures to come into compliance with our rules.
10. The Commission has historically held, in multiple station transactions, that the overall benefits
of allowing time for an orderly divestiture of broadcast properties outweighs the impact on diversity and
competition from common ownership during a reasonable period following the grant of the application.
However, the Commission has never found that a period greater than 12 months was appropriate to
accomplish the needed divestitures in a transaction where only television stations were involved. No
arguments or evidence have been presented in this proceeding to convince us that we should give the parties
twice the longest amount of time we have granted in the same type of transactions. Therefore, we deny the
request for 24 months to come into compliance with the national ownership cap and instead give the
applicants twelve months to comply.
XI. Multiple Ownership Issues
A A. Local Television Ownership Rule
2. Background and Standard. The merger of Viacom with CBS will result in the common
ownership of two television stations in the same Nielsen DMA in the following six markets: Philadelphia,
Boston, Dallas-Fort Worth, Detroit, Miami, and Pittsburgh. With regard to the television duopoly rule, in
the Television Ownership Order, we modified our rules to allow common ownership of two stations in the
same DMA, if eight independently owned and operating commercial and noncommercial television stations
will remain in the DMA post-merger, and at least one of the stations is not among the top four-ranked
stations in the market. As detailed below, Viacom has submitted a showing representing that each of these
newly created television duopolies will comply with our modified television duopoly rule.
3. Showing of Compliance. First, in Philadelphia, the fourth ranked DMA, Viacom controls the
license of WPSG(TV), Channel 57 and CBS controls the license of KYW-TV, Channel 3. Station
WPSG(TV) has the sixth largest audience share and KYW-TV has the third largest audience share in the
market. At least seventeen independently owned and operating television stations will remain in the
Philadelphia DMA post-merger. In Boston, the sixth ranked DMA, Viacom controls the license of WSBK-
TV, Channel 38 and CBS controls WBZ-TV, Channel 4. Station WSBK-TV has the sixth largest audience
share and WBZ-TV has the third largest audience share in the market. At least 15 independently owned and
operating television stations will remain in the Boston DMA post-merger. Next, in the seventh ranked
Dallas-Fort Worth DMA, Viacom controls KTXA(TV), Channel 21, and CBS controls KTVT(TV), Channel
11. Station KTXA(TV) has the fifth largest audience share and KTVT(TV) has the fourth largest audience
share in the market. At least 14 independently owned and operating television stations will remain in the
Dallas-Fort Worth DMA. Detroit, the eighth ranked DMA, is host to Viacom's WKBD(TV), Channel 50,
which has the fifth largest audience share in the market and CBS's WWJ-TV, Channel 62, which has the
fourth largest audience share. The Detroit market will have at least eight independently owned and
operating television stations remaining in the DMA post merger. In Miami, the 16th ranked DMA, Viacom
controls WBFS-TV, Channel 33, and CBS controls WFOR-TV, Channel 4. With regard to audience share,
the stations are ranked fourth and fifth, respectively. After the proposed merger, at least 13 independently
owned and operating television stations will remain in the Miami DMA. Finally, Pittsburgh, the 20th
ranked DMA, is host to Viacom's WNPA(TV), Channel 19, and CBS's KDKA-TV, Channel 2. Station
WNPA(TV) has the seventh largest audience share and KDKA-TV is ranked number one, with the largest
audience share in the market. Following the proposed merger, at least 8 independently owned and
operating television stations will remain in the Pittsburgh DMA.
4. Discussion. Having reviewed the showing submitted by the parties, we find that the television
duopolies created by the Viacom-CBS merger in the Philadelphia, Boston, Dallas-Fort Worth, Detroit,
Miami, and Pittsburgh DMAs, will be in compliance with the Commission's modified television duopoly
rule. Each of the affected markets is served by a minimum of eight independently owned and operating
television stations. Additionally, in each market at least one of the two commonly owned television stations
is not among the top four-ranked stations. Accordingly, the proposed station combinations meet the new
standards of our television duopoly rule, and we believe our core concerns regarding competition and
diversity will continue to be protected upon consummation of the proposed merger.
B. Radio-Television Cross-Ownership Rule
5. Background and Standard. Currently, CBS controls radio and television station combinations
in twelve markets: Boston, Minneapolis, Chicago, Detroit, New York, Pittsburgh, Baltimore, Los Angeles,
Philadelphia, San Francisco, Austin and Dallas/Fort Worth. The proposed Viacom-CBS merger will
result in radio and television station combinations in an additional eight markets: Atlanta, Houston, Seattle,
Tampa, Sacramento, Columbus, West Palm Beach and Washington, D.C. Thus, in total, Viacom will
control radio-television combinations in 20 U.S. television markets. In the Television Ownership Order, we
relaxed the radio-television cross-ownership rule "to permit same market joint ownership of radio and
television facilities up to a level that permits broadcasters and the public to realize the benefits of common
ownership while not undermining our competition and diversity concerns." There are three elements to
the revised rule. First, a party may own up to two television stations (provided this is permitted under our
revised duopoly rule or television LMA grandfathering policy) and up to six radio stations in any market
where at least 20 independently owned media voices remain in the market. In those markets where the
voice count component of our revised duopoly rule and radio-television cross-ownership rule would allow
a two television/six radio station combination, it may be in the form of one television station and seven
radio stations. Second, we will permit common ownership of up to two television stations (provided this
is permitted under our revised duopoly rule or television LMA grandfathering policy) and up to four radio
stations in any market where at least ten independently owned media voices remain in the market. Third,
we will permit common ownership of up to two television stations (provided this is permissible under our
revised duopoly rule or television LMA grandfathering policy) and one radio station regardless of the
number of independent voices in the market. We note that, in accordance with the Television Ownership
Order, where a merger involves stations in different radio metro markets, the voice count requirement must
be satisfied in each of those radio metropolitan markets ("radio metro markets") to qualify under our voice
count criteria. As detailed below, Viacom has submitted an exhibit, which purports to show that Viacom's
television-radio station combinations will be in compliance in 15 of the 20 markets. In the remaining five
markets, Viacom requests a period of six months to divest the requisite number of its radio stations in order
to comply with the revised radio-television cross-ownership rule. According to Viacom's showing, the
merged entity will comply with the numerical ownership/voice dependent limitations of the radio-television
cross-ownership rule in the markets of Tampa-St Petersburg, Fort Pierce-West Palm Beach, Atlanta,
Boston, Detroit, Columbus, Philadelphia, Pittsburgh, Houston, San Francisco, Seattle-Tacoma,
Minneapolis, New York, Washington, D.C., and Austin.
1. Tampa-St. Petersburg, New York, Philadelphia, Detroit, Boston, Seattle-
Tacoma
6. Discussion. Based on the number of stations in the radio and television station combinations
to be held by Viacom in Tampa-St. Petersburg, New York, Philadelphia, Detroit, Boston, and Seattle-
Tacoma, at least 20 independently owned media voices must remain in these markets post-merger.
Viacom's showing represents that, in compliance with our revised radio-television cross-ownership rule, at
least 20 voices will remain within each of these markets after the proposed merger. The station
combinations for each of the DMAs will be as follows: one television/six radio stations in Tampa-St.
Petersburg; one television/six radio stations in New York; two television/five radio stations in Philadelphia;
two television/six radio stations in Detroit; two television/five radio stations in Boston; and one
television/five radio stations in Seattle-Tacoma. We believe Viacom has sufficiently shown that there will
be at least 20 independent media voices for each station in each of these markets post merger, as consistent
with the numerical ownership limitations of such combinations in the first prong of our revised radio-
television cross-ownership rule, and that common ownership of two television stations in the Philadelphia,
Detroit, and Boston DMAs will not violate our revised duopoly rule or television LMA grandfathering
policy.
2. Fort Pierce-West Palm Beach, Atlanta, Columbus, Pittsburgh, Houston,
Minneapolis, Austin
7. Discussion. In order to comply with our revised radio-television cross-ownership rule, the
number of stations in the radio and television station combinations to be held by Viacom in the markets of
Fort Pierce-West Palm Beach, Atlanta, Columbus, Pittsburgh, Houston, Minneapolis, Washington, D.C.,
and Austin, require at least 10 independently owned media voices to remain in the market post-merger.
As to the station combinations, there will be a one television/two radio station combination in West Palm
Beach, a one television/three radio station combination in Atlanta, a one television/two radio station
combination in Columbus, a two television/four radio station combination in Pittsburgh, a one
television/four radio station combination in Houston, a one television/four radio station combination in
Minneapolis, and a one television/four radio station combination in Austin. We have reviewed Viacom's
showing of compliance and find that the proposed station combinations will comply with the numerical
ownership/voice count limitations of our radio-television cross-ownership rule after consummation of the
proposed merger. As required by the second prong of our radio-television cross-ownership rule, we find
that at least 10 independently owned media voices will remain in the market for each of the stations
licensed to these DMAs post-merger, and that common ownership of two television stations in the
Pittsburgh DMA will not violate our revised duopoly rule or television LMA grandfathering policy.
3. Baltimore, Washington, D.C., Sacramento, San Francisco
8. In the Baltimore DMA and radio metro market, CBS controls one television station and eight
radio stations. CBS also controls the licenses of six radio stations licensed to communities in the
Washington, D.C. radio metro market, which is in the Washington, D.C. DMA. The communities of license
are encompassed by the CBS Baltimore television station's Grade A contour, although they are in a separate
DMA and a separate radio market from the television station. Because Viacom currently controls a
television station in the Washington, D.C. DMA, the merged entity would have a one television/six radio
station combination in the Washington, D.C. market
9. A similar situation exists in the Sacramento market. There CBS currently controls seven radio
stations licensed to the Sacramento radio metro market and Viacom controls one television station in the
Sacramento DMA. CBS also controls one television station and seven radio stations in the San Francisco
DMA and radio metro market. The 2mV/m contour of one of CBS's radio stations licensed to the San
Francisco DMA and radio metro market encompasses Sacramento. The parties argue that prior
Commission precedent and market place realities dictate that the relevant market for the three Washington,
D.C. and one San Francisco radio stations, should be the DMA in which the stations are located.
10. CBS commonly owns its radio and television station combinations in the Baltimore and
Washington markets, pursuant to conditional waivers of the Commission's former radio-television cross-
ownership rule. When evaluating these waiver requests, the Commission focused its review on the market
where the stations were located. In granting these waivers, the Commission treated the Washington stations
and the Baltimore stations as being located in separate markets. We have continued to follow this policy
with similarly-situated radio-television cross-ownership combinations. For example, we found New York
to be the relevant market for New York radio stations that fell within the Grade A contour of a commonly-
owned television station located in the Hartford-New Haven DMA, for purposes of our radio-television
cross-ownership rule. In the circumstances of this case, therefore, as consistent with precedent, we find
that when applying the revised radio-television cross-ownership rule in the Baltimore and Washington
markets, the relevant market for a station is the market in which that station is located. Further, when
determining compliance under the three prongs of our revised rule in the Baltimore and Washington
markets, if a radio station in a combination is located in a separate radio metro market and DMA from a
commonly-owned television station, that radio station will not count toward the number of stations that an
entity may control. Accordingly, in analyzing the Baltimore DMA, we will not count the three CBS radio
stations located in the Washington, D.C. DMA as part of the Baltimore market, even though those stations
are within the Grade A contour of CBS' Baltimore television station. In addition to being consistent with
precedent, we believe our decision here reflects the Commission's rationale for modification of our radio-
television cross-ownership rule, "to balance our traditional diversity and competition concerns with our
desire to permit broadcasters and the public to realize the benefits of radio and television common
ownership."
11. With respect to the Sacramento combination, CBS's San Francisco radio station KFRC(AM)
triggers the radio-television cross-ownership rule because its 2mV/m contour completely encompasses
Sacramento. Viacom claims that the relevant market for KFRC(AM) should be San Francisco, the DMA
in which the station is located. Encompassment by the relevant signal contour (in this case, 2mV/m ), and
not the DMA, determines whether we will count radio station towards the number of stations an entity may
control in one market. Consequently, Viacom will control a one television/eight radio station combination
in the Sacramento market, which they acknowledge will violate our radio-television cross-ownership rule.
We will provide Viacom six months to file the application necessary to bring it into compliance with the
radio-television cross-ownership rule in the Sacramento market.
12. We shall now evaluate Viacom's showing in the markets of Washington, D.C., Baltimore, and
San Francisco based on our decisions in the two paragraphs above. In the Washington, D.C. DMA, Viacom
will control a one television/six radio station combination. Since 20 media voices will remain in the
relevant market post-merger, this combination comports with our radio-television cross-ownership rule.
However, in the Baltimore DMA, Viacom will control a one television/eight radio station combination.
Since Viacom does not meet the voice count component of the revised duopoly rule, this combination will
violate the radio-television cross-ownership rule. Viacom, therefore, has pledged to divest two Baltimore
radio stations, which will result in the DMA containing a one television/six radio station combination in a
market where 20 media voices will remain post-merger. We find, therefore, that the proposed station
combinations in the market of Washington, D.C. will comply with the numerical ownership/voice count
limitations of our radio-television cross-ownership rule post-merger, and that the proposed combination in
the Baltimore market will comply with the numerical ownership/voice count limitations of our radio-
television cross-ownership rule following divestiture of two radio stations. As detailed below, Viacom has
requested a six-month waiver in order to come into compliance in the Baltimore market. Finally, in the San
Francisco market, Viacom will control a one television/seven radio station combination. At least 20 media
voices will remain in the San Francisco market post-merger, at least eight of which are independently
owned and operating television stations in the San Francisco DMA. We find, therefore, that the proposed
combination in the San Francisco market will comply with the numerical ownership/voice count limitations
set forth in the first prong of our radio-television cross-ownership rule.
4. Los Angeles, Chicago, and Dallas-Fort Worth
13. Waiver Request. In addition to the Baltimore and Sacramento markets, the merger of Viacom
and CBS would not comply with the radio-television cross-ownership rule in Los Angeles, Chicago, and
Dallas-Fort Worth. With regard to the Los Angeles and Chicago DMAs, Viacom will control a one
television station/eight radio station combination post merger in each of these markets. Viacom has pledged
to divest one Los Angeles radio station and one Chicago radio station, which will result in each DMA
containing a one television/seven radio station combination. In markets where the voice count component
of our revised duopoly rule and radio-television cross-ownership rule would permit a party to own two
television and six radio stations, for a total of eight outlets, we also permit that party to own the same
number of outlets in the form of one television and seven radio stations. Consequently, a one
television/seven radio station combination will be permissible in these markets if they meet the voice count
restrictions for both our revised duopoly rule and radio-television cross-ownership rule. Each relevant
market, therefore, must contain at least 20 independently owned media voices post-merger, and each DMA
must contain eight independently owned and operating commercial and noncommercial television stations.
A one television/seven radio station combination will meet the numerical ownership/voice count limitations
of our new radio-television cross-ownership rule in both the Los Angeles and Chicago markets. As for the
Dallas-Fort Worth DMA, Viacom will control a two television/eight radio station combination post merger.
Here, Viacom has pledged to divest two radio stations in order to come into compliance with our revised
radio-television cross-ownership rule. This two television/six radio station combination also requires at
least 20 independently owned media voices remaining in the Dallas-Fort Worth market, and must meet our
revised duopoly rule and television LMA grandfathering policy.
14. Viacom asks the Commission for a six-month period of time from consummation to file
applications to divest the radio stations in the Baltimore, Los Angeles, Chicago, and Dallas-Ft. Worth
markets. According to Viacom, the Commission has long held that allowing those entities proposing
mergers or transfers of multiple stations a reasonable period of time to come into compliance with our rules
is supported by the benefits derived from such transactions. Citing Stockholders of CBS, Inc., Viacom
further contends that we allow such relief where the conflicts are incidental to the much larger merger, will
promote commerce, encourage investment in the broadcast industry, and allow for the free transferability
of broadcast licenses. In addition, Viacom contends the Commission has stated that a forced, immediate
sale could impose severe economic hardship on applicants without offsetting public interest benefits,
restrict the value of the assets and artificially limit the range of potential purchasers. Viacom also argues
that this six-month period of time would have no appreciable impact on diversity or competition. All of the
markets requiring divestiture are among the 25 largest media markets in the country. The Commission has
previously allowed common ownership by CBS in Los Angeles, Chicago and Baltimore of one
television/eight radio station combinations, at least on a temporary basis due, in "substantial part" to the
level of diversity and competition in these markets. Finally, Viacom points out that under the modified
ownership rules, these television/radio combinations would have been grandfathered, and CBS afforded the
opportunity to demonstrate that permanent retention of these stations would serve the public interest.
15. Discussion. As Viacom has noted, several of our past decisions did find temporary waiver of
our multiple ownership rules appropriate to facilitate multi-station transactions, especially when such
waiver was incidental to the larger transaction. Since that time, we have released our Television
Ownership Order, which substantially relaxes our radio-television cross-ownership rule, and allows
broadcasters the opportunity to take advantage of common ownership of a greater number of television and
radio stations in a given market. We continue, however, to weigh our decisions against our underlying goals
of diversity and competition in the broadcast market place. After reviewing the record, we do not believe
that the public interest will be disserved by allowing Viacom six months to divest the necessary number of
radio stations to come into compliance with our rules. The stations to be divested make up a small portion
of an extremely large merger involving two networks and multiple broadcast stations. Additionally, the
markets involved are among the largest in the country, each served by a plethora of independent media
voices. Our review of the applicant's showing finds that the Baltimore market will have at least 27
independently owned media voices post merger. The Chicago, Los Angeles and Dallas-Fort Worth markets
will each host at a minimum 32 independently owned media voices post merger. We also believe it is
important to note that under our relaxed ownership rules, these radio/television combinations in Baltimore,
Los Angeles, Chicago and Dallas-Fort Worth would be grandfathered until at least 2004 had CBS and
Viacom not entered into this proposed merger. Should the proposed transfer of control not take place, it
is possible that these radio/television combinations would exist for at least four more years. Thus, this brief
six-month period to divest the stations, we believe, would not harm diversity or hinder competition in a
manner conflicting with the public interest. We will, however, prohibit Viacom from divesting the stations
to any party whose acquisition would require waiver of our multiple ownership rules.
C. Satellite Waivers
16. We next consider the proposal of Viacom to continue operating stations KCCO-TV,
Alexandria, Minnesota, and KCCW-TV, Walker, Minnesota, as satellites of WCCO-TV, Minneapolis,
Minnesota and station WJMN-TV, Escanaba, Michigan as a satellite of WFRV-TV, Green Bay, Wisconsin.
Viacom requests a continuing satellite exemption of the local television multiple ownership rule, 47 CFR
73.3555(b), with respect to WCCO-TV, KCCO-TV, and KCCW-TV, which are all located in the
Minneapolis-St. Paul, Minnesota DMA. A satellite exemption is no longer required to permit common
ownership of WJMN-TV and WFRV-TV pursuant to the local television multiple ownership rule, 47 CFR
73.3555(b), as they are licensed to separate DMAs. Viacom requests, instead, a waiver of the main studio
rule, 47 CFR 73.1125, to permit continued operation of WJMN-TV without a local main studio.
17. Viacom bases its requests for satellite exemptions on the standards adopted in Television
Satellite Stations, 6 FCC Rcd 4212, 4215 (1991) Under that standard, applicants acquiring satellite stations
must show that the stations meet our satellite policy at the time of the assignment. However, an applicant
will be entitled to a presumption that satellite operation is in the public interest if it meets three criteria: (1)
no City Grade contour overlap exists between the parent and the satellite; (2) the satellite would provide
service to an underserved area; and (3) no alternative operator is ready and able either to construct or to
purchase and operate the satellite as a full-service station. If an applicant cannot qualify for the
presumption, we will evaluate the proposal on an ad hoc basis to determine whether other compelling
circumstances warrant grant of a waiver.
18. The satellites meet the first criterion because the City Grade contour of WCCO-TV does not
overlap the City Grade contour of either KCCO-TV or KCCW-TV. With respect to the second criterion,
Viacom has demonstrated, by using our "transmission" test, that the respective areas are underserved. That
test deems an area underserved if there are two or fewer full-service stations licensed to a proposed
satellite's community of license. No other full-service television station is licensed to Walker, Minnesota,
KCCW-TV's community of license and only one other full-power television station is licensed to
Alexandria, Minnesota, KCCO-TV's community of license.
19. As to the third criterion, we note that the Commission has approved continuing satellite status
for these stations on two recent occasions. In these determinations, the Commission relied on submissions
demonstrating that it would not be feasible to find a purchaser willing to operate any of the stations on a
stand-alone basis due to the small size of the respective markets, the expense of upgrading each station to
a stand-alone facility, and other demographic considerations. Viacom has submitted further evidence
demonstrating the unfeasibility of finding a purchaser willing to operate the respective stations on a stand-
alone basis, and we agree that the facts show that operation of the satellites as full-service stations is
unlikely to be profitable. While we find that this showing fails to meet the "presumptive" satellite waiver
standard, we do believe that it is strong enough to support continued satellite operation under our ad hoc
analysis. Therefore, we will grant Viacom authority to continue to operate these stations as satellites. As
to the main studio rule, the applicants have demonstrated that the Escanaba market is extremely limited in
size, that no other television station is licensed to that community and that maintenance of a main studio in
Escanaba is not economically viable. Based on this showing, we will grant a waiver of the main studio rule,
pursuant to 47 CFR 73.1125, with regard to WJMN-TV.
XX. The Petitions to Deny
A. NBMC
2. In its petition to deny and intervene, NBMC alleges that the proposed merger violates
numerous Commission rules and the public interest. Among the rules alleged to be violated are our EEO
rules and the news distortion policy. We deny NBMC's petition.
3. NBMC has claimed that there are 12 EEO proceedings pending against the applicant. Even if
evidence regarding these proceedings had been provided, the applicants only would have been required to
provide information regarding adverse findings or adverse final actions falling within the specified
categories of misconduct.
4. Finally, on the issue of news distortion, NBMC seems to allege that certain CBS affiliates in
Mississippi have either distorted or suppressed news related to civil rights issues. There are no specific
allegations of fact to support this claim. In addition, none of the stations that are the subject of the
applications are located in Mississippi. There is no legal basis to hold that CBS is liable for the local
programming decisions of independently owned affiliates or that such programming decisions are in any
way relevant to the merger. NBMC has failed to present any legal basis or to proffer any evidence that
would support denying the CBS/Viacom application. Therefore, we deny its petition.
E. The Stern Petitioners
6. In their petition to deny, Al Westcott, Tom Blackwell, and Glenn and Kathleen Benfield
(collectively the "Stern Petitioners"), allege that CBS has been violating 18 U.S.C. 1464, which governs
the broadcast of indecent or obscene material. These violations are alleged to have taken place during the
broadcast of Howard Stern's radio program. They also allege that CBS has permitted its radio stations to
broadcast "threatening remarks" against individuals who might file a complaint with the Commission, law
enforcement agencies or sponsors regarding the Howard Stern show. Finally, the Stern Petitioners contend
that CBS should be held liable for the actions of an alleged serial rapist in New York who apparently was
a listener of the Howard Stern show. In its opposition, CBS argues, among other things, that a September
1, 1995 Settlement Agreement between Infinity and the Commission specifically precluded use of material
aired prior to the agreement as a basis for a petition. CBS also argues that any material aired prior to June
4, 1998 is irrelevant as the Commission has already considered, and passed upon, the qualifications of CBS
within the context of a separate transfer of control application.
7. Section 310(d) of the Communications Act, by incorporating Section 308(b), requires us to
consider a proposed transferee's character qualifications before granting a transfer of control application.
This consideration entails examination of the transferee's compliance with the Communications Act and
with our rules, including our indecency restrictions. On December 26, 1996, the Commission approved the
transfer of control of Infinity radio stations to Westinghouse Electric Corporation. At that time, the
Commission dismissed two letters alleging that Infinity committed "past and pending" violations of federal
indecency law by broadcasting the "Howard Stern Show," because the letters failed to raise a substantial or
material question of fact concerning indecent programming. The Commission also noted that certain
broadcasts of the "Howard Stern Show," even if they were indecent, did not disqualify Infinity as a
Commission licensee. On December 1, 1997, Westinghouse Electric Corporation, having merged with
CBS prior to purchasing Infinity, changed its name to CBS Corporation, and, on June 4, 1998, purchased
the stock of American Radio Systems pursuant to Commission consent granted on May 27, 1998. The
Stern Petitioners base their instant petition to deny on transcripts of broadcasts aired prior to the May 27,
1998 order. Not only has the Commission considered substantially the same issues within the context of
our approval of the Westinghouse/Infinity merger, but has reviewed, and passed upon, CBS's basic
qualifications when approving the transfer of control of American Radio Systems stations. These issues
have been decided by the Commission and will not be revisited.
8. With respect to the allegation that CBS permitted their radio stations to broadcast "threatening
remarks" from Howard Stern, the Commission has already determined that the allegedly threatening
remarks made by Mr. Stern were "'off-the-cuff' comments complaining about those listeners who allegedly
[] paraphrased his material incorrectly," and were not "calculated to threaten or intimidate" those
complaining about his broadcasts. We see no reason to alter this conclusion in the context of this
application.
9. Finally, we reject the argument that CBS should be held liable for the actions of an alleged
rapist in New York who happened to be a listener to the program. Absent some tangible, causal link, such
as direct incitement, we will not hold a broadcast station liable for the actions of any or all of its listeners.
Consequently, for the reasons set forth above, we deny the petition filed by Al Westcott, Glenn and
Kathleen Benfield, and Tom Blackwell.
VII. Administrative Matters
10.We have reviewed the proposed merger and the related pleadings and find that the applicants
are fully qualified and that grant of the transfer of control of the CBS broadcast stations to Viacom will
serve the public interest, convenience, and necessity.
11.ACCORDINGLY, IT IS ORDERED, That the petitions to deny filed by the American Cable
Association, the National Black Media Coalition, the WEYS Television Corporation, and the Stern
Petitioners ARE DENIED, and the letter filed by A.H. Belo Corporation in opposition to the applications
IS DENIED.
12.IT IS FURTHER ORDERED, That the request for 24 months to come into compliance with
the Dual Network Rule, Section 73.658(g), IS DENIED, however, we GRANT a temporary 12-month
period from the date of the consummation of the transaction in order to allow Viacom/CBS to come into
compliance with the Dual Network Rule.
13.IT IS FURTHER ORDERED, That the request for 24 months to come into compliance with
the national television ownership cap, Section 73.3555(e), IS DENIED, however, we GRANT a
temporary 12-month period from the date of the consummation of the transaction in order to allow
Viacom/CBS to come into compliance with our national television ownership cap.
14.IT IS FURTHER ORDERED, That the requests for 6 months to come into compliance with
the radio-television cross-ownership rule, Section 73.3555(c), in the Los Angeles, Chicago, Dallas/Ft.
Worth, Sacramento and Baltimore markets ARE GRANTED, but within 6 months of consummation of
the transaction, Viacom/CBS is directed to file the applications necessary to bring it into compliance in
all five markets.
15.IT IS FURTHER ORDERED, That continued television satellite authorization, pursuant to
Note 5 of Section 73.3555, for KCCO-TV, Alexandria, Minnesota and KCCW-TV, Walker, Minnesota,
satellite stations of WCCO-TV, Minneapolis, Minnesota IS GRANTED, and a waiver of the main studio
rule, Section 73.1125(a), to permit operation of WJMN-TV, Escanaba, Michigan without a local main
studio IS GRANTED.
16.IT IS FURTHER ORDERED, That, pursuant to the request of Viacom and Section 1.103, this
order is effective upon adoption.
17.Accordingly, IT IS ORDERED, That the applications for consent to the transfer of control of
the CBS broadcast stations, applications BTCCT, BTCH, BTC, BTCTT, BTCTTL, BTCFTB, BTCFT
19991116ABA-AIN, as listed in Exhibit A, ARE GRANTED.
FEDERAL COMMUNICATIONS COMMISSION
Magalie Roman Salas
Secretary
EXHIBIT A
CBS Corporation seeks consent to transfer control of the following stations (TV, TV Translator, AM,
FM, FM Booster, and FM Translator) from the shareholders of CBS Corporation to Viacom Inc.:
Station
Service
Community of License
File Number
Facility ID
Number
KCBS-TV
TV
Los Angeles, CA
BTCCT-19991116ABC
9628
KDKA-TV
TV
Pittsburgh, PA
BTCCT-19991116AAX
25454
KEYE-TV
TV
Austin, TX
BTCCT-19991116AAY
33691
KYW-TV
TV
Philadelphia, PA
BTCCT-19991116AAZ
25453
WBZ-TV
TV
Boston, MA
BTCCT-19991116ABA
25456
WJZ-TV
TV
Baltimore, MD
BTCCT-19991116ABB
25455
KCCO-TV
TV
Alexandria, MN
BTCCT-19991116ABD
9632
KCCW-TV
TV
Walker, MN
BTCCT-19991116ABE
9640
KPIX-TV
TV
San Francisco, CA
BTCCT-19991116ABF
25452
WBBM-TV
TV
Chicago, IL
BTCCT-19991116ABG
9617
WCBS-TV
TV
New York, NY
BTCCT-19991116ABH
9610
WCCO-TV
TV
Minneapolis, MN
BTCCT-19991116ABI
9629
WFRV-TV
TV
Green Bay, WI
BTCCT-19991116ABJ
9635
WJMN-TV
TV
Escanaba, MI
BTCCT-19991116ABK
9630
WWJ-TV
TV
Detroit, MI
BTCCT-19991116ABL
72123
KTVT
TV
Dallas-Fort Worth, TX
BTCCT-19991116ABM
23422
KCNC-TV
TV
Denver, CO
BTCCT-19991116ABN
47903
WFOR-TV
TV
Miami, FL
BTCCT-19991116ABO
47902
KUSG
TV
St. George, UT
BTCCT-19991116ABP
35822
KUTV
TV
Salt Lake City, UT
BTCCT-19991116ABQ
35823
K64AA
TV Translator
Spring Glen, UT
BTCTT-19991116ABR
35838
K67AA
TV Translator
Aurora, UT
BTCTT-19991116ABS
35839
K53CF
LPTV
Aurora, UT
BTCTTL-19991116ABT
35837
K64BO
LPTV
Delta, UT
BTCTTL-19991116ABU
35840
K43AE
LPTV
Myton, UT
BTCTTL-19991116ABV
35836
KCBS
AM
Los Angeles, CA
BTC-19991116ABW
9637
KFWB
AM
Los Angeles, CA
BTC-19991116ABX
25457
KIKK
AM
Pasadena, TX
BTC-19991116ABY
25450
KILT
AM
Houston, TX
BTC-19991116ABZ
25440
KMOX
AM
St. Louis, MO
BTC-19991116ACA
9638
KNX
AM
Los Angeles, CA
BTC-19991116ACB
9616
KRLD
AM
Dallas, TX
BTC-19991116ACC
59820
KYCY
AM
San Francisco, CA
BTC-19991116ACD
25458
WBBM
AM
Chicago, IL
BTC-19991116ACE
9631
WBZ
AM
Boston, MA
BTC-19991116ACF
25444
WCBS
AM
New York, NY
BTC-19991116ACG
9636
WCCO
AM
Minneapolis, MN
BTC-19991116ACH
9642
WINS
AM
New York, NY
BTC-19991116ACI
25451
WMAQ
AM
Chicago, IL
BTC-19991116ACJ
25445
WWJ
AM
Detroit, MI
BTC-19991116ACK
9621
KCBS-FM
FM
Los Angeles, CA
BTCH-19991116ACL
9612
KIKK-FM
FM
Houston, TX
BTCH-19991116ACM
25449
KILT-FM
FM
Houston, TX
BTCH-19991116ACN
25439
KITS
FM
San Francisco, CA
BTCH-19991116ACO
18510
KITS-FM1
FM Booster
Pleasant Hill, CA
BTCFTB-19991116ACP
18524
KITS-FM2
FM Booster
Pleasanton, CA
BTCFTB-19991116ACQ
18521
KITS-FM3
FM Booster
San Francisco, CA
BTCFTB-19991116ACR
18519
KITS-FM4
FM Booster
Antioch, CA
BTCFTB-19991116ACS
18526
KLLC
FM
San Francisco, CA
BTCH-19991116ACT
9624
KRQR-FM1
FM Booster
San Ramon/Dublin, CA
BTCFTB-19991116ACU
9633
KLSX
FM
Los Angeles, CA
BTCH-19991116ACV
25075
KTWV
FM
Los Angeles, CA
BTCH-19991116ACW
25437
WARW
FM
Bethesda, MD
BTCH-19991116ACX
9619
WBBM-FM
FM
Chicago, IL
BTCH-19991116ACY
9613
WCBS-FM
FM
New York, NY
BTCH-19991116ACZ
9611
WHFS
FM
Annapolis, MD
BTCH-19991116ADA
72177
WKRK-FM
FM
Detroit, MI
BTCH-19991116ADB
9618
WLTE
FM
Minneapolis, MN
BTCH-19991116ADC
9641
WNEW
FM
New York, NY
BTCH-19991116ADD
25442
WODS
FM
Boston, MA
BTCH-19991116ADE
9639
WVMV
FM
Detroit, MI
BTCH-19991116ADF
25448
WXRT
FM
Chicago, IL
BTCH-19991116ADG
16853
WZGC
FM
Atlanta, GA
BTCH-19991116ADH
13805
WZLX
FM
Boston, MA
BTCH-19991116ADI
13806
KRTH
FM
Los Angeles, CA
BTCH-19991116ADJ
28631
WUSN
FM
Chicago, IL
BTCH-19991116ADK
28620
KLUV
AM
Dallas, TX
BTC-19991116ADL
25375
KLUV-FM
FM
Dallas, TX
BTCH-19991116ADM
67195
KYNG
FM
Dallas, TX
BTCH-19991116ADN
1087
WXYT
AM
Detroit, MI
BTC-19991116ADO
28627
WQYK-FM
FM
St. Petersburg, FL
BTCH-19991116ADP
28619
KHVN
AM
Fort Worth, TX
BTC-19991116ADQ
63780
KRBV
FM
Fort Worth, TX
BTCH-19991116ADR
63779
WSCR
AM
Chicago, IL
BTC-19991116ADS
28630
WJMK
FM
Chicago, IL
BTCH-19991116ADT
28621
KFRC
AM
San Francisco, CA
BTC-19991116ADU
1082
KROQ-FM
FM
Pasadena, CA
BTCH-19991116ADV
28622
WPGC-FM
FM
Morningside, MD
BTCH-19991116ADW
28632
WOMC
FM
Detroit, MI
BTCH-19991116ADX
28623
WYCD
FM
Detroit, MI
BTCH-19991116ADY
1089
WFAN
AM
New York, NY
BTC-19991116ADZ
28617
KDKA
AM
Pittsburgh, PA
BTC-19991116AEA
25443
KYW
AM
Philadelphia, PA
BTC-19991116AEB
25441
WPHT
AM
Philadelphia, PA
BTC-19991116AEC
9634
WOGL-FM
FM
Philadelphia, PA
BTCH-19991116AED
9622
WYSP
FM
Philadelphia, PA
BTCH-19991116AEE
28628
WIP
AM
Philadelphia, PA
BTC-19991116AEF
28626
KYCY-FM
FM
San Francisco, CA
BTCH-19991116AEG
1092
KYCY-FM1
FM Booster
Pleasanton, CA
BTCFTB-19991116AEH
1083
WQYK
AM
Seffner, FL
BTC-19991116AEI
28629
KVIL-FM
FM
Highland Park, TX
BTCH-19991116AEJ
28624
WJFK-FM
FM
Manassas, VA
BTCH-19991116AEK
28625
WCKG
FM
Elmwood Park, IL
BTCH-19991116AEL
71283
KFRC-FM
FM
San Francisco, CA
BTCH-19991116AEM
1084
KFRC-FM3
FM Booster
Walnut Creek, CA
BTCFTB-19991116AEN
1090
KOAI
FM
Fort Worth, TX
BTCH-19991116AEO
23440
WLIF-FM
FM
Baltimore, MD
BTCH-19991116AEP
28637
WJFK
AM
Baltimore, MD
BTC-19991116AEQ
28636
KRLA
AM
Pasadena, CA
BTC-19991116AER
25076
WPGC
AM
Morningside, MD
BTC-19991116AES
28638
WXYV
FM
Baltimore, MD
BTCH-19991116AET
63778
WAOK
AM
Atlanta, GA
BTC-19991116AEU
63775
WVEE
FM
Atlanta, GA
BTCH-19991116AEV
63776
WBCN
FM
Boston, MA
BTCH-19991116AEW
26897
KSGS
AM
St. Louis Park, MN
BTC-19991116AEX
57833
WXPT
FM
St. Louis Park, MN
BTCH-19991116AEY
54425
WXRK
FM
New York, NY
BTCH-19991116AEZ
58579
WBGR
AM
Baltimore, MD
BTC-19991116AFA
43864
WBMD
AM
Baltimore, MD
BTC-19991116AFB
1913
KEZR
FM
San Jose, CA
BTCH-19991116AFC
1176
KLUE
FM
Soledad, CA
BTCH-19991116AFD
54968
KMJ
AM
Fresno, CA
BTC-19991116AFE
26923
KOOR
AM
Clovis, CA
BTC-19991116AFF
29429
KRAK
AM
Sacramento, CA
BTC-19991116AFG
65482
KSFN
AM
North Las Vegas, NV
BTC-19991116AFH
47745
KUPL
AM
Portland, OR
BTC-19991116AFI
26926
KXNT
AM
North Las Vegas, NV
BTC-19991116AFJ
33068
WECK
AM
Cheektowaga, NY
BTC-19991116AFK
1914
WTIC
AM
Hartford, CT
BTC-19991116AFL
66464
KBAY
FM
Gilroy, CA
BTCH-19991116AFM
35401
KBBT-FM
FM
Banks, OR
BTCH-19991116AFN
12551
KFRG
FM
San Bernardino, CA
BTCH-19991116AFO
1241
KINK-FM
FM
Portland, OR
BTCH-19991116AFP
53068
KLUC-FM
FM
Las Vegas, NV
BTCH-19991116AFQ
47744
KMGV
FM
Fresno, CA
BTCH-19991116AFR
18409
KMXB
FM
Henderson, NV
BTCH-19991116AFS
51676
KMXV
FM
Kansas City, MO
BTCH-19991116AFT
2446
KMZQ-FM
FM
Henderson, NV
BTCH-19991116AFU
12560
KOQO-FM
FM
Fresno, CA
BTCH-19991116AFV
29296
KQBT
FM
Taylor, TX
BTCH-19991116AFW
63201
KRNC
FM
Fresno, CA
BTCH-19991116AFX
26933
KSKS
FM
Fresno, CA
BTCH-19991116AFY
29924
KSRC
FM
Kansas City, MO
BTCH-19991116AFZ
11279
KUFO
FM
Portland, OR
BTCH-19991116AGA
26932
KVSR
FM
Fresno, CA
BTCH-19991116AGB
18406
KXFG
FM
Sun City, CA
BTCH-19991116AGC
63912
KXTE
FM
Pahrump, NV
BTCH-19991116AGD
2100
KYMX
FM
Sacramento, CA
BTCH-19991116AGE
72116
KZZ0
FM
Sacramento, CA
BTCH-19991116AGF
65481
K232CO
FM Translator
Boulder City, NV
BTCFT-19991116AGG
51674
K272DD
FM Translator
Pahrump, NV
BTCFT-19991116AGH
51673
WAZU
FM
Circleville, OH
BTCH-19991116AGI
64717
WBMX
FM
Boston, MA
BTCH-19991116AGJ
1901
WBUF
FM
Buffalo, NY
BTCH-19991116AGK
53699
WCMF-FM
FM
Rochester, NY
BTCH-19991116AGL
1905
WEAT-FM
FM
West Palm Beach, FL
BTCH-19991116AGM
29567
WGRR
FM
Hamilton, OH
BTCH-19991116AGN
72126
WIRK-FM
FM
West Palm Beach, FL
BTCH-19991116AGO
1918
WJYE
FM
Buffalo, NY
BTCH-19991116AGP
1915
WKRQ
FM
Cincinnati, OH
BTCH-19991116AGQ
11276
WLLD
FM
Holmes Beach, FL
BTCH-19991116AGR
18527
WLVQ
FM
Columbus, OH
BTCH-19991116AGS
11277
WPXY-FM
FM
Rochester, NY
BTCH-19991116AGT
53966
WQSR
FM
Catonsville, MD
BTCH-19991116AGU
1916
WRBQ-FM
FM
Tampa, FL
BTCH-19991116AGV
11943
WRCH
FM
New Britain, CT
BTCH-19991116AGW
1910
WRMM-FM
FM
Rochester, NY
BTCH-19991116AGX
1907
WSJT
FM
Lakeland, FL
BTCH-19991116AGY
51987
WTIC-FM
FM
Hartford, CT
BTCH-19991116AGZ
66465
WWMX
FM
Baltimore, MD
BTCH-19991116AHA
74196
WYLX
FM
Lebanon, OH
BTCH-19991116AHB
40915
WYRK
FM
Buffalo, NY
BTCH-19991116AHC
1908
WYUU
FM
Safety Harbor, FL
BTCH-19991116AHD
18512
WZMX
FM
Hartford, CT
BTCH-19991116AHE
1900
WZNE
FM
Brighton, NY
BTCH-19991116AHF
6859
WNKS
FM
Charlotte, NC
BTCH-19991116AHG
53975
WSOC-FM
FM
Charlotte, NC
BTCH-19991116AHH
20339
WSSS
FM
Charlotte, NC
BTCH-19991116AHI
20338
KBEQ-FM
FM
Kansas City, MO
BTCH-19991116AHJ
48961
KFKF-FM
FM
Kansas City, MO
BTCH-19991116AHK
34431
KMPS
AM
Seattle, WA
BTC-19991116AHL
6387
KBKS
FM
Tacoma, WA
BTCH-19991116AHM
27020
WFNZ
AM
Charlotte, NC
BTC-19991116AHN
53974
WGIV
AM
Charlotte, NC
BTC-19991116AHO
6585
WBAV-FM
FM
Gastonia, NC
BTCH-19991116AHP
6587
WDSY-FM
FM
Pittsburgh, PA
BTCH-19991116AHQ
18525
WPEG
FM
Concord, NC
BTCH-19991116AHR
6586
W298AE
FM Translator
New Brighton, PA
BTCFT-19991116AHS
18514
WBZZ
FM
Pittsburgh, PA
BTCH-19991116AHT
20350
WZPT
FM
New Kensington, PA
BTCH-19991116AHU
20351
KHTK
AM
Sacramento, CA
BTC-19991116AHV
20352
KNCI
FM
Sacramento, CA
BTCH-19991116AHW
20353
KXOA
FM
Roseville, CA
BTCH-19991116AHX
11273
KMPS-FM
FM
Seattle, WA
BTCH-19991116AHY
20356
KYCW
FM
Seattle, WA
BTCH-19991116AHZ
1091
KZOK-FM
FM
Seattle, WA
BTCH-19991116AIA
20357
KEZK-FM
FM
St. Louis, MO
BTCH-19991116AIB
13507
KEZN
FM
Palm Desert, CA
BTCH-19991116AIC
11747
KYKY
FM
St. Louis, MO
BTCH-19991116AID
20358
WHOK-FM
FM
Lancaster, OH
BTCH-19991116AIE
72311
W272AT
FM Translator
Columbus, OH
BTCFT-19991116AIF
72310
KJCE
AM
Rollingwood, TX
BTC-19991116AIG
1243
KAMX
FM
Luling, TX
BTCH-19991116AIH
48651
KKMJ-FM
FM
Austin, TX
BTCH-19991116AII
66489
WNCX
FM
Cleveland, OH
BTCH-19991116AIJ
41390
KKJZ
FM
Lake Oswego, OR
BTCH-19991116AIK
4115
KUPL-FM
FM
Portland, OR
BTCH-19991116AIL
4114
K251AD
FM Translator
Beaverton, OR
BTCFT-19991116AIM
4116
KSFM
FM
Woodland, CA
BTCH-19991116AIN
59598
In the Matter of the Application of Shareholders of CBS Corporation (Transferor)
And Viacom, Inc. (Transferee) For Transfer of Control of CBS Corporation and
Certain Subsidiaries, Licensees of KCBS-TV, Los Angeles, CA et al.
Statement of Commissioner Harold W. Furchtgott-Roth,
Concurring in Part and Dissenting in Part
I concur in the fundamental decision to grant CBS's Application to transfer radio licenses to
Viacom, Inc. I also concur in the Order's disposition of matters relating to the dual network rule,
national ownership cap, local television ownership rules, satellite waivers, and petitions to deny this
transfer. Although I strongly support timely deregulatory action on our ownership rules in the context of
the broadcast biennial review, I must at the same time acknowledge their current legal force and effect
and therefore agree with their application to the instant license transfer request.
I must dissent, however, from application of the radio-television cross ownership rule to
CBS/Viacom because that rule shrinks the combined entity's statutory right to local radio ownership. To
my mind, such a result is in derogation of statutory right and thus untenable under the Administrative
Procedure Act. See 5 U.S.C. section 706 (providing that a "reviewing court shall . . . hold unlawful and
set aside agency action . . . found to be . . . short of statutory right").
As I stated in last year's review of local broadcast ownership rules:
I believe that limitations on radio ownership under the one-to-a-market rule that constrict the
statutory radio ownership caps in section 202(b) of the Telecommunications Act of 1996 are
legally unsound. As [here],there are instances where ownership of a television station in addition
to radio stations will trigger application of the one-to-a-market rule, which may impose lower caps
on radio ownership than does section 202(b).
Dissenting Statement of Commissioner Harold W. Furchtgott-Roth, In the Matter of Review of the
Commission's Regulations Governing Television Broadcasting and in the Matter of Television Satellite
Stations Review of Policy and Rules, 14 FCC Rcd. 12,903 (rel. Aug. 6, 1999) ("Local Ownership
Report").
For example, under section 202(b), a broadcaster is affirmatively and specifically authorized to
own as many as 8 stations in certain local markets. See 47 U.S.C. section 202(b) ("[I]n a radio market
with 45 or more commercial radio stations, a party may own, operate, or control up to 8 commercial
radio stations, not more than 5 of which are in the same service."). But under the Commission's one-to-a-
market rule, which was promulgated pursuant to the generalized public interest standard, a party may not,
contrary to the express language of section 202(b), own 8 radio stations if it happens to also own a
television station in that market. In such a situation, the party can own only 1 television and 7 radio
stations or 2 television and 6 radio stations. See Local Ownership Report at para. 9 & n.19.
This contraction of statutory ownership rights is exactly what happened to CBS/Viacom in the
Sacramento, Baltimore, Los Angeles, Chicago, and Dallas-Fort Worth markets. See Memorandum
Opinion & Order at paras. 29-36. Under section 202(b), as long as there are 45 radio stations in the
market (an issue the Order does not even address), CBS/Viacom is by federal statute affirmatively entitled
to own 8 radio stations. Yet by dint of the radio-television cross-ownership rule, the Commission forces
the company to divest itself of property in order to fall within a wholly regulatory, more restrictive limit.
Again, as I have previously explained:
Nothing in section 202(b). . . indicates that radio ownership rights are contingent on non-
ownership of a television station. Section 202(b) is not phrased in the conditional; it does not say
that ownership of other kinds of communications properties should adversely affect the rights
established by that section. Nor are the ownership rights created there limited to "radio-only"
combinations, as the Commission [calls them]; rather, the provision simply speaks of radio
ownership, without reference to broadcast combinations.
The one-to-a-market rule is, of course, based on the generalized "public interest" standard, whereas
the caps established in 202(b) are very specific. Regulations promulgated under the general public
interest grant of authority should not trump such particularized decisions by Congress. In short, the
Commission cannot by rulemaking shrink statutorily granted ownership rights.
Dissenting Statement of Commissioner Harold W. Furchtgott-Roth, Local Ownership Report.
While I have my policy and even constitutional concerns with the other ownership limits applied
today and hope to see them soon repealed or modified, none of them is clearly in derogation of a positive
statutory right to ownership at defined levels. Because this is true of the radio-television cross-ownership
rule, its operation in this Order appears to violate the Administrative Procedure Act. I cannot vote for such
action, especially where, as here, the limit in question is not statutorily required.
Finally, I note my hope and expectation that other license transfer applicants will be subject to the
same straightforward approach to section 309 taken in this Order namely, application of existing statutory
provisions and Commission rules to the proposed transfer, without a separate (and usually more restrictive)
analysis taken pursuant to the public interest standard. I also hope and expect that other license transfer
applicants will receive the same reasonable treatment when it comes to objections grounded in antitrust
theory that is, deferral to the Department of Justice. See Memorandum Opinion and Order at para. 16
(suggesting that concerns regarding potential abuse of market power should be addressed not by the
Commission but by antitrust authorities); id. at n. 13 (noting that DOJ has examined the specific issue of
concentration in program supply markets and thus declining to address the matter).
For the foregoing reasons, I concur in part but dissent from the relevant radio-television part of this
decision.
mAY 3, 2000
SEPARATE STATEMENT OF COMMISSIONER GLORIA TRISTANI
Re: CBS-Viacom Merger
The Commission's Order approving the merger between CBS and Viacom is most notable for
what it fails to address. As mystery readers know, sometimes it is the dog that does not bark that
explains a situation's underlying reality.
Diversity
First, the Order completely ignores the effect of the CBS-Viacom merger on one of the
fundamental purposes of the Communications Act maintaining a diversity of media voices. The
potential concentration of viewpoints on television is especially important. Television is still the
means by which most Americans get their news and information, and is still the medium that
children spend far more time with than any other.
One would never know from the Commission's Order that this merger involves the combination
of two of the behemoths of the media industry. CBS owns, among other interests, the CBS network
(with over 200 affiliates), 20 television stations, 162 radio stations, cable networks TNN and
Country Music Television, King World and Eyemark Entertainment. Viacom owns, among other
interests, the UPN network, 17 television stations, Paramount Pictures, Paramount Television,
Spelling Entertainment Group, Blockbuster Video, Simon and Schuster, and cable networks MTV,
Nickelodeon, Nick at Nite, VH-1, Showtime, TV Land and the Movie Channel.
Will the combination of these assets give one entity too much control over the marketplace of
ideas? The Commission provides no analysis, and, most disturbing, does not even ask the question.
The Commission's failure to examine this issue constitutes an abdication of its responsibility to
ensure that the merger will serve the public interest and effectuate the purposes of the
Communications Act. Ultimately, the American public will pay the price if they do not have
meaningful access to the diverse and antagonistic viewpoints that democratic deliberation requires.
I express no opinion on the results of such a diversity analysis in this case. But the
Commission's failure to even raise the issue is an ominous development for those who are looking
to the Commission to examine these mega-mergers in their broader context, rather than simply as
a mechanical exercise to verify compliance with specific rules.
Radio Market Definition
Second, the Commission fails to acknowledge that it shifts the definition of "radio market" to suit its
purposes. In particular, the Commission ignores the conflict between the definition of radio "market" it
applies to the one-to-a-market rule and the definition of radio "market" that applies to the local radio
ownership cap rules. Put simply, under the market definition adopted for the one-to-a-market rule, a radio
station is present only in the Arbitron market to which it is assigned (unless its contour completely
encompasses the city of license of a television station in another market, as CBS's San Francisco radio
station KFRC(AM) does in Sacramento). By contrast, under the local ownership cap rules, a radio "market"
is defined as all stations with signal contours that overlap the commonly-owned stations, regardless of the
Arbitron market to which those stations are assigned. The Order's failure to address the conflicting market
definitions is all the more glaring because the one-to-a-market and local ownership cap rules are contained
in the very same section of the Commission's rules (Section 73.3555).
I understand the desire to pretend that the local ownership cap rules do not exist. As I have written on
several occasions, those rules are irrational and there is no defending them. One of the problems is that
a radio market definition based on overlapping signal contours often results in markets that bear
little relation to reality. The Order implicitly agrees, rejecting the notion that radio markets should
be defined by overlapping signal contours. Instead, the Order looks to the markets established by
a commercial ratings service as a more appropriate reflection of which stations actually serve
particular listeners. Logically, the Commission's shifting definitional approach makes no sense.
Either radio stations with overlapping signal contours should count as being in the same "market"
or they should not. They cannot count as being "in the market" for one part of Section 73.3555 and
then "out of the market" for another.
Beyond the illogic, these conflicting market definitions have a clear real-world effect: they
permit more consolidation than if the Commission applied a consistent market definition. For
the local ownership caps, the more stations that count as being "in the market" the greater the
consolidation, because the rules provide for increasing levels of ownership as the number of
stations in a market increases. A radio market definition based on signal contour overlaps can
dramatically increase the number of stations in the "market" as distant stations whose signals
overlap with the outermost reaches of stations in the market are swept into the count. In the
recent situation in Wichita, Kansas, for example, the Commission's signal contour approach
more than doubled the number of stations that Arbitron assigned to the Wichita market -- from
24 to 52 stations. That increase meant that an entity could own up to eight stations in Wichita,
rather than only six that would be possible under Arbitron's station count. Similarly, CBS owns
5 FM stations in the 38-station Sacramento Arbitron market. But in a 38-station market, CBS
would be limited to no more than 4 FM stations. In order to be able to own a fifth FM station,
CBS must rely on out-of-market stations with overlapping signal contours as being "in the
market."
For the one-to-a-market rule, the consequences of using a signal contour method are reversed --
bringing additional stations into the market generally would restrict consolidation. Here, for
instance, CBS-Viacom will own one television and 7 radio stations in both the San Francisco and
Sacramento markets. That could not happen under a signal contour approach, because the San
Francisco stations would put CBS-Viacom over the one-to-a-market rule limit in Sacramento, and
vice versa.
In other words, the Commission treats the San Francisco and Sacramento stations as being in
the same market to permit a level of consolidation that otherwise would not be possible, but then it
treats them as being in separate markets when counting them together would limit consolidation
under other rules. It's tempting to say that the Commission simply adopts whatever definition of
radio market will maximize consolidation, regardless of logic or consistency. One might be able to
dismiss such a charge as cynical, but not as inaccurate.
Conclusion
Those who are counting on the Commission to use its public interest authority to scrutinize the impact
of huge media mergers should be disheartened by this decision. The Commission shows little sensitivity to
the broader context in which these mergers are taking place, and little stomach for limiting consolidation
based on diversity concerns. The sound of a dog not barking is a clue; the sound of a watchdog not barking
is a problem.